Transnet CEO race turns hostile

Sikonathi Mantshantsha | Wed, 02 Sep 2009 14:05
[miningmx.com] -- The struggle for the top job at state-owned freight and logistics company Transnet has spilled into open warfare with the top contender suspended pending a disciplinary enquiry on charges of alleged irregularities.

Transnet Freight Rail CEO Siyabonga Gama, one of three short-listed candidates to replace Maria Ramos as group chief executive, was suspended on Tuesday after he accused the organisation of a "witch hunt and conspiracy" against him. This followed his appearance in a pre-trial hearing presided over by acting CEO Chris Wells and human resources director Pradeep Maharaj last week.

"These trumped up charges and disinformation campaign is a well calculated move to dissuade him from him ascending to the top job," Themba Langa of Langa Attorneys said. He's fingered Wells as being behind this.

Langa represented Gama in the Transnet enquiry. He also wrote to auditing firm Ernst & Young, accusing it of being used by Wells in a conspiracy against his client.

Langa confirmed that Gama had indeed applied and was short-listed by cabinet for the chief executive's position. Wells withdrew from the race earlier this year, but is said to prefer Sipho Maseko (CEO of BP South Africa) for the position.

Transnet acknowledged to Fin24.com last week that it had instituted a disciplinary process against Gama. "This relates to alleged serious breaches in certain procurement contracts," wrote spokesman John Dludlu. "This is an internal company matter and we don't wish to comment further at this stage in due deference to all parties concerned."

"Mr Siyabonga Gama, the chief executive at Transnet Freight Rail, has been suspended, pending the outcome of an internal disciplinary process," Transnet said in a statement on Wednesday.

"Mr Gama has been requested to attend a disciplinary hearing relating to an alleged serious breach of governance requirements in respect of two procurement contracts."

Langa said his client faces two charges. The first is for "exceeding his powers" by awarding a contract to GNS Security in 2008. This was for the provision of security against copper cable theft. "Within his powers, my client signed off a five-month contract approved by Transnet's procurement committee," said Langa.

Thereafter the security division extended the contract on a month-to-month basis for seven months, said Langa, which he said he understands was normal at Transnet. "It was the security department's prerogative to end or extend the contract and my client had nothing to do with the extensions after the original one expired."

The other charge is that Gama failed to comply with the board's resolution concerning engineering division Transwerk's project to build a total of 50 locomotives in 2004, together with Sibambene Trade and Services.

Although Transwerk was outside of Gama's area of responsibility at the time, he accepted the board's invitation to oversee the project even though Transwerk had its own chief executive. He appointed a project manager, who was later fired for alleged financial links to Sibambene.

Now that the project did not succeed as hoped, Gama was being blamed when the person who had to build the actual trains is not, said Langa. When Langa was asked why his client accepted a job outside of his area of responsibility in the first place, he responded that the board had confidence in Gama and thought he was the correct person to oversee the project. "He was a change agent and a star performer at Transnet."

Transnet Freight Rail is responsible for hauling South Africa's coal, iron ore and manganese along with other bulk products to the coast. South Africa is Europe's largest supplier of thermal coal and the world's fourth largest supplier of iron ore. It is a leading manganese and ferrochrome producer.